FOA media releases 2012

Forest owners endorse criticism of ETS changes

Forest owners have endorsed the strong criticisms made by the Parliamentary Commissioner for the Environment of proposed changes to the NZ Emissions Trading Scheme.

“The commissioner and our members continue to believe that an ETS is the right mechanism to price carbon and reduce emissions. But despite being significantly weakened by previous amendments, changes now before a select committee will weaken the scheme further,” says Forest Owners Association chief executive David Rhodes.

“With carbon prices hovering around $NZ5 a tonne, there is no incentive for emitters to invest in clean technology when even that price is halved for them. Nor is there the incentive for land owners to plant trees to store carbon.”

Mr Rhodes says that for carbon forestry to stack up as investment, a minimum carbon price of between $15 and $20 tonne is needed. Indeed, at present carbon prices it is once again economic for forest owners on suitable land to pay any conversion liabilities and convert forests to dairying, tourism or lifestyle blocks.

“The forest industry will not fade away and most existing forests will be replanted at harvest but new planting for carbon will be virtually nonexistent and there will be deforestation,” he says.

“If that is what the government wants, that’s its call. But it does run contrary to everything that the major political parties were saying during the development of the ETS. Namely, that addressing climate change was a critical issue and that forestry would play an important part in helping New Zealand reach its emission targets.

“It is also at odds with the efforts being made by every other international ETS to try to encourage forestry and other offsets. Even the EU is now looking at incorporating forestry’s contribution.

“The government has a right to change its mind, but in so doing it must recognise the long-term nature of a forest investment. This needs to be central to anything it asks of the industry.”

Mr Rhodes says the association agrees with the PCE that, based on present policy settings, there is no way New Zealand will reach its legislated target of a 50 per cent reduction in emissions by 2050.

“We fully support providing sufficient protection to ensure export industries are not unfairly and unreasonably put at risk but the measures proposed go way beyond that.”

Footnote

The PCE's submission on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill can be found here: http://bit.ly/UI5dcc

The FOA has not yet presented its submission on the Bill to Parliament's Finance and Expenditure Committee. When it does, this will be posted on the association's website.